NEW YORK Dec 10 A creditor of U.S. television
station owner Equity Media Holdings Corp EMDA.O, which filed
for Chapter 11 bankruptcy protection this week, has asked a
judge to convert the case to liquidation, or dismiss it,
according to court papers.
In an emergency motion filed on Wednesday, Silver Point
Finance LLC, a lender on one of the company's senior credit
facilities, said the case was filed with "no planning and no
exit strategy" and that the company had been a victim of "gross
mismanagement." It said the case should be converted from
Chapter 11 to Chapter 7 for an orderly liquidation, managed by
a court-appointed overseer.
Equity Media filed for protection from its creditors on
Tuesday in U.S. Bankruptcy Court in the Eastern District of
Arkansas. The company, founded in 1998, owns 121 television
stations, licenses and permits. Spanish language broadcasting
company Univision Communications Inc [UVN.UL] holds an 8
percent stake in the company, according to Equity Media's
Silver Point last week sought a judicial foreclosure and
receivership proceeding in the Circuit Court of Pulaski County,
Arkansas, to try to get their money back from the company.
"The sole purpose of (Equity Media's) bankruptcy filing was
to stay the foreclosure proceeding and thwart the secured
lenders' attempt to protect the rapidly deteriorating value of
their collateral," Silver Point said in the court filing.
Silver Point also said Equity Media had rejected "repeated
offers" from the lender to provide debtor-in-possession
financing, so the company could hire experienced bankruptcy
lawyers for the case and fund an orderly sale of its assets as
a going concern in Chapter 11.
"There is no prospect for a successful restructuring,"
Silver Point said in the court documents, adding that the
company may have put its subsidiaries at risk by only filing
the parent company into Chapter 11.
An attorney for Equity Media declined to comment.
An emergency hearing has been scheduled for Dec. 16,
according to court documents.
(Reporting by Ilaina Jonas and Emily Chasan; editing by